EUobserver said:Portugal has been told to apply for a rescue from the EU bail-out fund lest Spain be sucked into the vortex, according to reports in German media.
The European Central Bank and a majority of member states in the eurozone are laying heavy pressure on the narrow Iberian nation to be the third country to tap the European Financial Stability Facility, according to a report based on unnamed sources in the Financial Times Deutschland.
European leaders and a number of analysts fear that should Portugal default, Spain too would be dragged down. While the debts of Greece, Ireland and Portugal are thought to so far be manageable, Spain would empty the eurozone's emergency piggy bank. http://euobserver.com/9/31362
Sound familiar?EUobserver said:EU leaders insisted that a report that heavy pressure was being applied to Portugal to apply for financial assistance from a eurozone bail-out fund was false.
"It's absolutely, completely false - every reference for an aid plan for this country," said European Commission President Jose Manuel Barroso, speaking to reporters at an OECD conference in Paris. [...] The office of the Portuguese prime minister, Jose Socrates, echoed Mr Barroso's words, saying that the report was "totally false". EUobserver / Portugal 'absolutely' not under pressure, say leaders